Study reveals rapid adoption of cloud services for HR software

But less than half of the organisations surveyed achieved significant cost savings.

According to a recently released report by Information Services Group, about half of the organisations that use subscription cloud services for HR software can achieve cost savings of up to 30 percent. The company’s 2019 Industry Trends in HR Technology and Service Delivery report explores the state of HR technology and services today and provides guidance to address some of the challenges and opportunities organisations face as they move through the phases of HR tech capability toward digital transformation. It finds, among other things, that moving to cloud-based HR software that relies on software-as-a-service (SaaS) often costs more than anticipated.

However, more than 60 percent of companies cite significant savings in the areas of IT/technology operations and HR administration after implementing them. It also found that companies moving to cloud-based HR software that relies on SaaS are driving the move away from licensed software, which nearly three-quarters of respondents used as of 2018.

Reads the report: “By next year, more than a quarter of companies (26 percent) will be using SaaS-based software, twice the rate of 2018. Additionally, more than double the number of companies plan to use hybrid approaches for their HR software in 2020 compared with 2018. These shifts are coming at the cost of on-premise software, which is falling in popularity.”

When asked about the ability to translate SaaS technology to measurable business value (e.g. increased retention, reduced time to fill or other business-value measures), 41 percent of survey respondents say they have achieved measurable business value by adopting SaaS, while 59 percent say they have not. 

The report presents results of 271 companies surveyed with a series of questions about their HR technology and service delivery environment. The companies represented a cross-section of industries operating in key geographic regions around the world and ranged in size from 1 000 employees to more than 20 000 employees.